LEASE
      AGREEMENT WITH OPTION TO PURCHASE


     


    THIS
      LEASE AGREEMENT WITH OPTION TO PURCHASE (the “Agreement”) is made, entered into
      and effective as of this 1st day of December, 2005, by and between THE BREWER
      FAMILY CHARITABLE REMAINDER ANNUITY TRUST NO. 1, with an address of P.O. Box
      1710, Ponca City, Oklahoma 74602, ATTN: Larry J. Bartlett, Trustee (“Landlord”),
      and SHUMATE MACHINE WORKS, INC., 12060 FM 3083, Conroe, Texas 77301, ATTN:
      Larry
      C. Shumate (“Tenant”).


    



    WITNESSETH:


     


    For
      and
      in consideration of the covenants and agreements hereafter set forth, the
      parties hereto agree as follows:


     


    1. Premises.
      Landlord hereby leases, demises and lets unto Tenant, and Tenant hereby leases
      from Landlord upon the covenants, conditions and terms herein provided, a
      portion of certain real property having a street address of 1011 Beach-Airport
      Road, Conroe, Texas 77301, as more fully described on Exhibit “A” attached
      hereto, together with all buildings and other improvements located thereon,
      hereafter collectively referred to as the “Premises.”


     


    2. Term.
      Unless
      sooner terminated under the provisions of this Agreement, the term of this
      Agreement (the “Term”) shall commence on the date hereof (the “Commencement
      Date”) and shall expire on the day before the third year anniversary of the
      Commencement Date.


     


    3. Condition
      to Occupancy.
      Tenant
      shall, at Tenant’s own expense and as soon as practicable after execution of
      this Agreement, cause the electrical service to the improvements located on
      the
      Premises (the “Building”) to be separately metered in such a manner that the
      portion of the Building being sublet by Tenant back to Landlord under the
      sublease agreement executed contemporaneously herewith shall have its own
      electrical meter and the remainder of the electrical service to the Building
      shall have a separate meter. Tenant agrees and acknowledges that completion
      of
      the separate metering of electrical service shall be a condition precedent
      to
      Tenant’s occupancy of the building for purposes of conducting Tenant’s business
      of manufacturing.


     


    

      

         

      


      

         


        

          



      


      

         

      

    


    4. Rent.
      Tenant
      shall pay Landlord a base monthly rental (the “Rent”) in the amount of
      $14,149.21 per month. Rent shall be payable on the 1st
      day of
      each month during the Term, except that the first installment of Rent shall
      be
      payable (on a prorated basis as provided in the following sentence) on the
      Commencement Date. If this Agreement shall commence on a day other than the
      1st
      day of a
      month, or expire on a day other than the last day of a month, the installment
      of
      Rent for such month shall be prorated based on a ratio, the numerator of which
      shall be the number of days during such month that this Agreement was in effect
      and the denominator of which shall be the total number of days in such month.
      Rent shall be mailed or delivered to Landlord at Landlord’s address stated above
      or to such other place as Landlord may from time to time designate in
      writing.


     


    5. Taxes.
      Tenant
      shall pay all ad valorem taxes levied, assessed or imposed upon or against
      the
      Premises during the term of this Agreement. Ad valorem taxes for which Tenant
      is
      liable and which are levied or assessed for the year in which this Agreement
      commences shall be prorated based on a ratio, the numerator of which shall
      be
      the number of days during such year that this Agreement was in effect and the
      denominator of which shall be the total number of days in such year.
      Additionally, Tenant agrees to pay all taxes and assessments levied, assessed
      or
      imposed upon or against any of the personal property of Tenant now or hereafter
      placed by tenant in or upon the Premises. Tenant shall also pay all use,
      license, sales and permit fees and taxes which may at any time during the term
      of this Agreement be imposed upon or with respect to or as a result of any
      use
      made of the Premises by Tenant. Tenant shall additionally pay any assessments
      for special improvements, including, but not limited to, widening of exterior
      roads, installation or hook-up to sewer lines, sanitary and storm drainage
      systems and other lines and installations.


     


    6. Insurance.
      Tenant
      shall maintain during the term of this Agreement standard “all risk insurance
      coverage” on the Premises in an amount equal to the full replacement cost of all
      improvements located on the Premises. Tenant shall further maintain a policy
      or
      policies of commercial general liability insurance, with the premiums fully
      paid
      on or before the due dates, issued and binding upon a solvent insurance company
      properly authorized to do business in the State of Texas, such insurance to
      afford minimum protection of not less than $1 million for personal injury or
      death in any one occurrence and not less than $1 million for property damage
      in
      any one occurrence. All such policies of insurance mentioned in this paragraph
      6
      of this Agreement shall be issued by a reputable company acceptable to Landlord
      and shall show Landlord as an additional insured/loss payee as Landlord’s
      interest may appear, and such company or companies shall be instructed to notify
      landlord of any lapse or anticipated cancellation or termination of coverage
      within a reasonable time so as to permit Landlord, at its option, to pay such
      premiums to keep such insurance coverage in force and effect.


     


    

      

         

      


      

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    7. Utilities.
      Tenant
      acknowledges that Landlord has provided water, electricity, gas, sewage and
      telephone connections to the Premises. Tenant shall be responsible for payment
      of all charges for electricity, water, sewage and other services billed to
      or on
      account of the Premises, excepting only electricity usage under the separately
      metered portion of the Building subleased by Tenant to Landlord as hereinbefore
      referenced in paragraph 3. No interruption in utility services, whether rending
      the Premises untenantable or otherwise, shall be the basis for abatement of
      Rent
      and Tenant shall remain obligated for Rent notwithstanding any such interruption
      in service.


     


    8. Maintenance,
      Repairs, Replacements and Services.
      Tenant,
      at its own risk and expense, shall maintain and keep in good operational repair
      the walls, roof, foundation and other structural portions of the Premises and
      all water and service lines, sewer, gas, wiring and public utility connections
      and all utility lines and duets which serve the Premises. Tenant shall promptly
      make and complete any such repairs and shall repair any and all damage to the
      Premises which may result from its failure to make or delay in promptly making
      the same. Additionally, Tenant shall, at its own risk and expense, maintain
      and
      keep in good operational repair (reasonable wear and tear and damage by casualty
      excepted) all other portions of the Premises, including, but not limited to,
      plumbing pipes and fixtures, electrical wiring and fixtures, windows, doors
      and
      door locks, walls, floor coverings and carpets, air conditioning, ventilating
      and heating systems and lighting. Tenant, at its own risk and expense, shall
      provide routine care for the lawn and shrubbery. Tenant shall maintain the
      Premises in a clean and orderly condition and shall, at its own cost and
      expense, provide janitorial and cleaning services to the Premises and shall
      not
      permit accumulation of waste or refuse matter on the Premises. Tenant has
      inspected and knows the condition of the Premises and has accepted the Premises
      in good order and condition at the Commencement Date. Tenant warrants that
      the
      Building and improvements on the Premises, as well as the grounds, parking
      areas, fences and adjoining properties have been fully examined by Tenant and
      that Tenant has reviewed the survey map of the Premises and Tenant takes the
      same “AS IS,” with no warranties, express or implied. Tenant further
      acknowledges that it has satisfied itself that the Premises and the Building
      are
      in compliance with all local, state and federal ordinances, laws, statutes
      and
      regulations of every nature whatsoever, and Tenant agrees that Tenant shall
      be
      solely liable for making any improvements, alterations or modifications of
      the
      Premises that may be required by any state, county, city or federal agency
      for
      the safety or convenience of any invitees or employees of Tenant, subject to
      Landlord’s approval in writing of such alterations, modifications or
      improvements. Tenant’s obligations hereunder shall include, without limitation,
      any alterations, modifications or improvements necessary to be or remain in
      compliance with regulations promulgated by the Occupational Safety and Health
      Administration or required under the Americans With Disabilities Act or the
      Texas Health and Safety Code.


     


    

      

         

      


      

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    9. Use
      of
      the Premises.
      Subject
      to the provisions hereof, Tenant shall have the right to occupy and use the
      Premises for all lawful commercial purposes. Tenant shall not permit to be
      conducted on the Premises any business which is contrary to any valid municipal,
      state or federal law as then interpreted and enforced. If there are applicable
      restrictions and/or property owner association rules affecting the Premises,
      Tenant will have been deemed to have reviewed the same and accepted said
      restrictions/rules as part of this Agreement and will have determined that
      said
      restrictions and/or rules do not materially prevent tenant from using the
      Premises as intended under this agreement. No warranty has been made by Landlord
      as to whether or not the business use contemplated herein can be conducted
      or
      can be safely or lawfully conducted on the Premises.


     


    10. Alterations,
      Additions, Changes and Improvements.
      Tenant
      shall not make any structural or non-structural alterations, additions, changes
      or improvements to the Premises without Landlord’s prior written consent, such
      consent not to be unreasonably withheld, conditioned or delayed.


     


    11. Sublease/Assignment.
      Except
      for the sublease of a portion of the Premises by Tenant to Landlord, as
      referenced in paragraph 3 hereof, said sublease to be executed contemporaneously
      herewith, Tenant shall not assign this agreement nor sublet the Premises, in
      whole or in part, during the term hereof.


     


    12. Signs.
      Tenant,
      at its sole risk and expense, shall have the right to install upon the Premises
      signs identifying Tenant’s business. Tenant shall maintain any sign that it
      places on the Premises in good order and condition.


     


    13. Casualty.
      In the
      event the Premises are damaged by fire or other casualty, Tenant shall remain
      fully liable hereunder and shall not be entitled to any abatement or reduction
      of Rent during the period required for repair or replacement of any part of
      the
      Premises.


     


    14. Quiet
      Enjoyment.
      Landlord represents, warrants and covenants that upon paying Rent and performing
      the covenants on its part to be performed hereunder Tenant shall and may
      peaceably and quietly have, hold and enjoy the Premises for the Term
      aforesaid.


     


    15. Right
      of Access.
      Landlord and its representatives may enter the Premises after reasonable notice
      to Tenant, at any reasonable time and in a manner which does not interfere
      with
      Tenant’s ability to conduct its business in the ordinary course for the purpose
      of inspecting the Premises and ensuring that Tenant is in compliance with its
      obligations hereunder.


     


    16. Holding
      Over.
      In the
      event Tenant does not exercise its option to purchase as hereinafter provided,
      this Agreement shall expire at the end of the Term hereof and absent further
      written agreement to the contrary, Tenant shall not hold over and shall vacate
      the Premises at the expiration of the Term.


     


    

      

         

      


      

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    17. Condemnation.
      If the
      whole of the Premises or such portion thereof as will make the Premises unusable
      for Tenant’s purposes be condemned by any legally constituted authority for any
      public use or purpose, then, in either of said events, the Term shall cease
      from
      the time when possession thereof is taken by public authorities and Rent and
      other charges due under this Agreement shall be accounted for as between
      Landlord and Tenant as of that date. Any awards from a condemning authority
      attributable to the Premises shall be awarded to Landlord.


     


    18. Default.
      It is
      mutually agreed that: (i) in the event Tenant shall default in the payment
      of
      any monetary amount herein reserved when due and shall fail to cure said default
      within five (5) days after written notice thereof from Landlord; or, (ii) if
      Tenant shall be in default of performing any of the non-monetary terms or
      provisions of this Agreement on its part to be performed, and such default
      continues after notice from Landlord for more than fifteen (15) days, then
      and
      in either such even Landlord may exercise any and all legal or equitable
      remedies afforded Landlord under Texas law, including, but not limited to,
      the
      right to terminate this Agreement or the Tenant’s right of possession of the
      Premises and/or bring an action against Tenant for damages. It is further
      mutually agreed that in the event Landlord shall be in default in performing
      any
      of the terms or provisions of this Agreement on its part to be performed and
      such default continues after notice from Tenant for more than thirty (30) days,
      then and in such event Tenant may exercise any and all legal or equitable
      remedies afforded Tenant under Texas law, including, but not limited to, the
      right to bring an action against Landlord for damages. In any action or
      proceeding brought by either party against the other under this Agreement or
      relating to the Premises, the prevailing party shall be entitled to recover
      from
      the other party investigation costs and attorneys’ fees, court costs and other
      legal expenses incurred by such party in such action or proceeding as the court
      may find to be reasonable.


     


    19. Landlord’s
      Lien.
      Except
      as restricted by law, Tenant grants unto Landlord a contractual landlord’s lien
      against all of Tenant’s effects, inventory, fixtures, appliances, goods, wears,
      trademarks and equipment located on said Premises to secure Tenant’s performance
      hereunder and Landlord shall not be liable to Tenant for any damage arising
      out
      of the attempt to perfect and enforce this lien. This contractual Landlord’s
      lien is in addition to and not in lieu of any other statutory and/or
      constitutional landlord’s liens.


     


    

      

         

      


      

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    20. Indemnification.
      Tenant
      agrees to indemnify and hold Landlord harmless from any and all claims and/or
      liability arising out of the operation of Tenant’s business and arising out of
      Tenant’s use of the Premises, and agrees to indemnify Landlord against all
      costs, expenses, lost time, attorneys’ fees, expert fees, court reporter fees,
      court costs, interest and penalties arising out of any claim involving Tenant’s
      use of the Premises and/or Tenant’s business. Any and all such expenses incurred
      by Landlord hereby shall bear interest at 18% per annum from the date said
      cost,
      expense or loss is incurred or paid. Landlord shall be entitled, but not
      obligated, at Landlord’s sole option, to perform any obligation or expend any
      sums required to be performed or expended by tenant hereunder and shall be
      entitled to be reimbursed by Tenant upon written demand, together with interest
      as hereinbefore specified.


     


    21. Notice.
      Any
      notice, communication, request, reply or advice, herein severally and
      collectively for convenience called “Notice,” in this Agreement provided or
      permitted to be given, made or accepted by either party to the other must be
      in
      writing and may be given or served by depositing the same in the Untied States
      Mail, postage prepaid, certified and addressed to the party to be notified
      with
      return receipt requested or by reputable overnight courier service or by
      facsimile. Notice deposited in the mail in the manner hereinabove described
      shall be effective unless otherwise stated herein on the 3rd
      day,
      exclusive of Saturdays, Sundays and postal holidays, after it is so deposited.
      Notice given in any manner other than for herein shall be effective only if
      and
      when received by the party to be notified. Rejection or other refusal to accept
      or the inability to deliver because of changed address of which no Notice was
      given pursuant to this paragraph shall be deemed to be receipt of the Notice
      sent. For purposes of Notice, the addresses of the parties shall, until changed
      as herein provided, be as set forth on the cover page of this Agreement.
      However, the parties hereto and their respective successors and assigns shall
      have the right from time to time and at any time to change their respective
      addresses and each shall have the right to specify as its address any other
      address within the continental United States by at least fifteen (15) days
      written notice to the other party; provided, however, no party may designate
      more than one such place and address to receive Notices pursuant to the terms
      hereof.


     


    

      

         

      


      

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    22. Grant
      of Option.
      For and
      in consideration of the sum of $10.00 and other good and valuable consideration,
      the receipt and sufficiency of which are hereby acknowledged, Landlord does
      hereby grant, bargain and sell to Tenant the exclusive right and option for
      and
      during the Option Period as defined hereinbelow to purchase the Premises in
      accordance with the terms and provisions herein contained.


     


    23. Exercise
      of Options.
      Provided that Tenant is not in default under this Agreement, the option to
      purchase herein granted may be exercised by Tenant at any time within the Option
      Period by written notice from Tenant to Landlord, given in strict accordance
      with the provisions of paragraph 20 hereof. For purposes of this agreement,
      the
      Option Period shall mean that period of time from the Commencement Date to
      and
      ending on the 90th
      day
      preceding the expiration of the Term hereof. In the event of termination of
      this
      Agreement prior to expiration of the Term, the Option Period shall immediately
      and simultaneously thereupon terminate.


     


    24. Failure
      or Refusal to Exercise Option.
      In the
      event Tenant does not exercise the option to purchase within the Option Period
      and in the manner provided herein, then Tenant shall have no further right
      or
      option to purchase the Premises and the consideration for this option shall
      be
      retained by Landlord.


     


    25. Agreement
      to Sell and Purchase.
      Upon
      the timely and proper exercise of the option herein granted, Landlord agrees
      to
      sell and convey the Premises to Tenant, and Tenant hereby agrees to purchase
      and
      pay Landlord for the Premises.


     


    26. Purchase
      Price.
      The
      Purchase Price to be paid by Tenant to Landlord for the Premises shall be
      $1,825,000.00, subject to the following amount to be credited for Rent paid
      hereunder. The Rent is based upon the amount necessary to amortize the Purchase
      Price of $1,825,000.00, at 7% interest over a period of 240 months, thereby
      producing the Rent amount of $14,149.21. Utilizing an amortization schedule,
      with the variables expressed in the preceding sentence, Tenant shall be entitled
      to credit against the Purchase Price in an amount equal to the cumulative
      principal reduction as reflected by such amortization schedule as of the last
      rent payment by Tenant prior to closing of such purchase and sale of the
      Premises. As hereinafter used, the term “Purchase Price” shall refer to the
      Purchase Price of $1,825,000.00, and adjusted as set forth in this paragraph
      26.
      By way of example, in the event Tenant exercises its option to purchase as
      of
      the termination of this Agreement (i.e.,
      Tenant
      has made 36 full installments of Rent), Tenant shall be entitled to credit
      for
      Rent paid hereunder in the total amount of $139,890.18, thereby making the
      Purchase Price $1,685,109.82.


     


    

      

         

      


      

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    27. Payment
      of Purchase Price.
      The
      Purchase Price shall be payable to Landlord by Tenant at closing, in cash or
      by
      cashier’s check or wire transfer of funds.


     


    28. Title
      Policy.
      Landlord shall furnish to Tenant, at Tenant’s expense, an owner policy of title
      insurance issued by a reputable title insurance company acceptable to Tenant,
      licensed to do business in the State of Texas, in an amount not less than the
      Purchase Price, dated at or after closing, insuring Tenant against loss under
      the provisions of the title policy subject to the promulgated exclusions
      including existing building and zoning ordinances and the following
      exceptions;


     


    

      	 	(i)	restrictive covenants, if any;



      	 	(ii)	standard printed exception for standby fees, taxes
              and
              assessments;



      	 	(iii) 	liens created as part of any financing by Tenant
              of the
              Purchase Price;



      	 	(iv) 	easements of record;



      	 	

              (v)

            	

              reservations
                or exceptions otherwise permitted by this Agreement or as may be
                approved
                by Tenant in writing;

            



      	 	(vi)	standard printed exception as to marital
              right;




    

      	 	

              (vii)

            	

              standard
                printed exception as to waters, tide lands, beaches, streams and
                related
                matters;

            


    


    

      	 	

              (viii)

            	

              standard
                printed exception as to discrepancies, conflicts, shortages in area
                for
                boundary lines, encroachments or protrusions or overlapping
                improvements.

            


    


     


    

      

         

      


      

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    29. Commitment.
      Within
      twenty (20) days after the title company receives a copy of this Agreement,
      along with Tenant’s written notice of exercise of the option to purchase,
      Landlord shall furnish to Tenant a commitment for title insurance (the
“Commitment”), at Tenant’s expense, along with legible copies of restrictive
      covenants and documents, if any, evidencing exceptions in the Commitment
      (“Exception Documents”) other than standard printed exceptions. Landlord
      authorizes the title to mail or to hand-deliver the Commitment and Exception
      Documents to Tenant at Tenant’s address set forth herein. If the Commitment and
      Exception Documents are not delivered to Tenant within the specified tie, the
      time for delivery will automatically be extended up to fifteen (15) days or
      to
      the closing date, whichever is earlier.


    



    30. Survey.
      Within
      twenty (20) days after receipt of the exercise of the option to purchase, Tenant
      shall cause the Premises to be surveyed, at Tenant’s expense, in order to obtain
      an accurate legal description of the Premises.


     


    31. Objections.
      Within
      ten (10) days after Buyer receives the Commitment, Exception Documents and
      the
      survey, Tenant may object in writing to defects, exceptions or encumbrances
      to
      the title other than those items set forth in paragraph 28 hereof. Tenant’s
      failure to object within the time allowed will constitute a waiver of Tenant’s
      right to object. Landlord shall timely cure objections of Tenant or any third
      party lender within a reasonable time after Landlord receives the objections
      and
      the closing date will be extended as necessary.


     


    32. Date
      and Place of Closing.
      The
      closing hereunder shall occur at such place as to which Landlord and Tenant
      may
      agree. Except as herein provided, the closing date shall be on or before sixty
      (60) days following Landlord’s receipt of Tenant’s exercise of the option to
      purchase. In the event the closing date occurs after expiration of the Term
      of
      the Agreement hereunder, Tenant shall continue to pay Rent from the expiration
      of the term until the closing date.


     


    

      

         

      


      

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    33. Closing
      Deliveries.
      At
      closing Landlord shall execute and deliver a General Warranty deed conveying
      title to the Premises to Tenant and showing no additional exceptions to those
      permitted in paragraph 28 hereof. Tenant shall deliver to Landlord the Purchase
      Price in a form as hereinbefore set forth. 


     


    34. Settlement
      and Other Expenses.
      At
      closing, Landlord shall be responsible for payment of all expenses relating
      to
      releases of existing liens, tax statements or certificates, preparation of
      the
      General Warranty Deed and one-half of the escrow fee. Tenant shall be
      responsible for all other expenses, including but not limited to, loan expenses,
      appraisal fees, loan application fees, credit report, preparation of loan
      documents, interest on notes from date of disbursement to date of first payment,
      recording fees, copies of easements and restrictions, mortgagee title policy
      with endorsements required by lender, owner’s policy of title insurance and
      commitment therefor, loan-related inspection fees, photos, amortization
      schedules, one-half of escrow fee, transfer fees for cooperative or associate
      membership for utility services and any prepaid items which may be required
      by
      Tenant’s lender.


     


    35. Waiver
      of Warranty.
      Sale of
      the Premises hereunder shall be “AS IS.” ALL IMPLIED WARRANTIES OF FITNESS,
      SUITABILITY OR HABITABILITY REGARDING THE PREMISES ARE EXPRESSLY WAIVED BY
      TENANT TO THE EXTENT PERMITTED BY LAW. ALL IMPLIED WARRANTIES OF
      MERCHANTABILITY, GOOD WORKMANSHIP AND/OR GOOD FAITH AND FAIR DEALINGS PRESENTLY
      EXISTING OR TO COME INTO EFFECT BECAUSE OF ANY OF THE DUTY CREATED HEREUNDER
      ARE
      SPECIFICALLY WAIVED BY THE PARTIES HERETO.


     


    36. Entire
      Agreement.
      This
      Agreement shall constitute the entire agreement of the parties hereto with
      respect to the subject matter hereof. All prior agreements between the parties
      with respect to the subject matter hereof, whether written or oral, are
      superseded by this agreement and shall be of no force and effect. This Agreement
      cannot be changed, modified or discharged orally, but only by an agreement
      in
      writing signed by the parties hereto.


     


    

      

         

      


      

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    37. Severability.
      If any
      term, covenant, condition or provision of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, void or unenforceable, the remainder
      of
      the provisions hereof shall remain in full force and effect and shall in no
      way
      be affected, impaired or invalidated thereby.


     


    38. Construction.
      In
      construing this Agreement, feminine or neuter pronouns shall be substituted
      for
      those masculine in form and vice versa, and plural terms shall be substituted
      for singular and singular for plural in any place in which the context so
      requires. This Agreement shall be construed without regard to the identify
      of
      the party who drafted the various provisions hereof. Moreover, each and every
      provision of this Agreement shall be construed as though all parties hereto
      participated equally in the drafting thereof. As a result of the foregoing,
      any
      rule or construction that a document is to be construed against the drafting
      party shall not be applicable hereto.


     


    39. Paragraph
      Headings.
      The
      paragraph headings are inserted only for convenience and in no way define,
      limit
      or describe the scope or intent of this Agreement, nor in any way affect this
      Agreement.


     


    40. Relationship
      of Parties.
      Nothing
      contained herein shall be deemed or construed as creating a relationship of
      principal and agent or of partnership or a joint venture between the parties
      hereto, it being agreed that no provision herein contained nor any acts of
      the
      parties herein shall be deemed to create any relationship between the parties
      hereto, other than the relationship of Landlord and Tenant.


     


    41. Cumulative
      Effect.
      Unless
      expressly provided to the contrary in this Agreement, each and every one of
      the
      rights, remedies and benefits provided by this Agreement shall be cumulative
      and
      shall not be exclusive of any other such rights, remedies or benefits allowed
      by
      law. The failure of Landlord or Tenant to enforce against the other any
      provision, covenant or condition herein by reason of either of them committing
      any breach of or default under this Agreement shall not be deemed a waiver
      thereof, nor void or affect the right of the agreed party to enforce the same
      covenant or condition on the occasion of any subsequent breach or default;
      nor
      shall the failure of either party to exercise any option in this Agreement
      upon
      any occasion arising therefor be deemed or construed to be a waiver of the
      right
      to exercise that same kind of option upon any subsequent occasion, except as
      expressly provided to the contrary herein.


     


    

      

         

      


      

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    42. Binding
      Effect.
      The
      provisions of this Agreement shall bind and inure to the benefit of the parties
      hereto and their respective successors and assigns.


     


    43. Governing
      Law.
      This
      Agreement shall be governed by, construed and enforced in accordance with the
      laws of the State of Texas.


     


    44. Memorandum
      of Lease Agreement.
      A
      memorandum of this Agreement in the form attached hereto as Exhibit “B” shall be
      executed and recorded by Landlord and Tenant as soon as practicable after the
      Commencement Date.


    



    IN
      WITNESS WHEREOF, this
      Agreement is executed in multiple originals as of the date first above
      written.


     


    

      	 	THE BREWER FAMILY CHARITABLE
	 	REMAINDER ANNUITY TRUST NO. 1
	 	 
	 	By:  /s/
              Larry J. Bartlett, Trustee
	 	   Larry
              J.
              Bartlett, Trustee
	 	 
	 	 
	 	SHUMATE MACHINE WORKS, INC.
	 	 
	 	By: /s/
              Larry C. Shumate
	 	     Larry C. Shumate,
              President


    


     


    

      

         

      


      

        12


        

          



      


      

         

      

    


    




    Exhibit
      “A”


     


    PREMISES
      DESCRIPTION


    



    The
      buildings occupied as a shop or warehouse, excepting approximately the West
      250
      feet of the shop building presently occupied by Modco Industries Incorporated,
      as a closure, manufacturing and warehouse facility, and in addition thereto
      approximately 600 square feet of office space presently occupied by Modco
      Industries Incorporated, said building being located on a tract of land
      beginning at a 1⁄2” Iron Rod for the Southwest corner of the herein described
      tract at the SW corner of Block 3 of a division of the Baseke Survey, and the
      NW
      corner of Airport Heights Subdivision, map or which is recorded in Volume 7,
      Page 377, Map Records of Montgomery County, Texas; thence N 14 ̊
      38’ 25”
W a distance of 640.86 feet to an axle at the NW corner of Block 4 of the
      Subdivision of the Baseke Survey in the S Line of that certain 20-acre tract
      described in Volume 233, Page 235, Deed Records of Montgomery County, Texas;
      thence N 75 ̊
      19’ 28”
E with a S Line and the S Line of that certain 17.97-acre tract described in
      Volume 613, Page 260, Deed Records of Montgomery County, Texas, a distance
      of
      1142.00 feet to a 1⁄2” Iron Rod in the W Line of the Airport Beach County Highway;
      thence S 28 ̊
      45’ 52”
E with a W Line a distance of 659.77 feet to a 1⁄2” iron Rod for the SE corner of
      the herein described tract; thence S 75 ̊
      17’ 00”
W with a N Line of Airport Heights Subdivision a distance of 1303.00 feet to
      the
      place of beginning, containing 17.973 acres of land, more or less.


    



    LESS
      AND
      EXCEPT all of that portion of the above-described tract lying N of the Center
      Line of a 60’ right-of-way which intersects with Airport Beach County Highway
      and runs approximately through the center of the tract to its Westerly boundary.
      


    



    

      

         

      


      

         


        

          



      


      

         

      

    



    Exhibit
      “B”


     


    MEMORANDUM
      OF LEASE AGREEMENT


    



    STATE
      OF
      TEXAS          
      )


                         )
      ss:


    COUNTY
      OF
      MONTGOMERY      )


    



    The
      Brewer Family Charitable Remainder Annuity Trust No. 1, Larry J. Bartlett,
      Trustee “Landlord,” and Shumate Machine Works, Inc., “Tenant,” do hereby declare
      this Memorandum of Lease Agreement s of the 1st day of December,
      2005.


     


    1. Pursuant
      to a Lease Agreement dated December 1, 2005 (the “Lease”), Landlord has leased
      to Tenant and Tenant has leased from Landlord the real property described in
      Exhibit “A” attached hereto, and by this reference incorporated herein, and all
      improvements located on such real property (the “Premises”) pursuant and subject
      to the terms, covenants and conditions contained in the Lease.


     


    2. The
      term
      of the Lease commenced on the date of the Lease (“Commencement Date”) and unless
      extended or earlier terminated in accordance with the terms and provisions
      of
      the Lease continues until the day before the third year anniversary of the
      Commencement Date.


     


    3. In
      the
      Lease, Landlord granted to Tenant an option to purchase the Premises (the
“Option”) pursuant to all terms and conditions contained therein and further
      providing that if not exercise prior to the end of the term of the Lease, the
      Option would expire and Tenant would have no further right to purchase the
      Premises.


     


    4. This
      memorandum is intended only as notice of the Lease and the Option and is not
      to
      be construed as a summary thereof and in no way modifies any of the terms of
      the
      Lease. In the event the terms contained herein should conflict with the terms
      and conditions of the Lease, the Lease shall control.


    

       


      

        	 	THE BREWER FAMILY CHARITABLE
	 	REMAINDER ANNUITY TRUST NO. 1
	 	 
	 	By:  /s/
                Larry J. Bartlett, Trustee
	 	   Larry
                J.
                Bartlett, Trustee
	 	 
	 	 
	 	SHUMATE MACHINE WORKS, INC.
	 	 
	 	By: /s/
                Larry C. Shumate
	 	     Larry C. Shumate,
                President


      


       

    


    

      

         

      


      

         


        

          



      


      

         

      

    



    ACKNOWLEDGMENT


    



    STATE
      OF
      OKLAHOMA           
)


                                                            
      )
      ss:


    COUNTY
      OF
      KAY                      
)


    



    Before
      me, the undersigned, a Notary Public in and for said County and State, on this
      22nd
      day of
      November, 2005, personally appeared Larry J. Bartlett, to me known to be the
      identical person who signed the name of the maker thereof to the within and
      foregoing instrument as Trustee of The Brewer Family Charitable Remainder
      Annuity Trust No. 1, and acknowledged to me that he executed the same as his
      free and voluntary act and deed, and as the free and voluntary act and deed
      of
      said Trust, for the uses and purposes therein set forth.


     


    Given
      under my hand and seal the day and year last above written.


     


    

      	 My Commission Expires:	 /s/ Cynthia Ann
              Holmes
	 Aug. 26, 2006 	  Notary
              Public # 02014533 


    


           


       


    



    ACKNOWLEDGMENT


    



    

      STATE
        OF
        OKLAHOMA           
)


                                                              
        )
        ss:


      COUNTY
        OF
        KAY                      
)




    Before
      me, the undersigned, a Notary Public in and for said County and State, on this
      22nd
      day of
      November, 2005, personally appeared Larry C. Shumate, to me known to be the
      identical person who signed the name of the maker thereof to the within and
      foregoing instrument as President of Shumate Machine Works, Inc., and
      acknowledged to me that he executed the same as his free and voluntary act
      and
      deed, and as the free and voluntary act and deed of said corporation, for the
      uses and purposes therein set forth.


     


                  
      Given under my hand and seal the day and year last above written.


     


    

       


      

        	 My Commission Expires:	 /s/ Debra Schalabra
	 Aug. 4, 2007	  Notary
                Public #__________  


      

    


    
 


    

      

         

      


      

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